After seeing strength for much of the session, stocks pulled back sharply in the final hour of trading on Wednesday. The tech-heavy Nasdaq showed a particularly steep drop, while the Dow managed to cling to a modest gain.
The major averages eventually ended the session mixed. While the Dow inched up 36.78 points or 0.1 percent to 28,032.38, the Nasdaq plunged 139.85 points or 1.3 percent to 11,050.47 and the S&P 500 slid 15.71 points or 0.5 percent to 3,385.49.
The late-day pullback came despite a dovish monetary policy announcement by the Fed, with the central bank leaving interest rates unchanged and signaling rates are likely to remain at near-zero levels for years to come.
The Fed announced its widely expected decision to keep the target range for the federal funds rate at zero to 0.25 percent.
The economic projections provided along with the announcement suggest most Fed officials expect interest rates to remain unchanged through at least 2023.
The central bank said it expects rates to remain at current levels until labor market conditions reach levels consistent with maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.
The projections from Fed officials suggest consumer price inflation will remain below 2.0 percent until at least 2023.
The Fed’s latest estimates point to a 3.7 percent contraction in GDP in 2020, reflecting an improvement from the 6.5 percent plunge forecast in June.
However, the Fed downwardly revised its estimates for GDP growth in 2021 and 2022 to 4.0 percent and 3.0 percent, respectively. GDP growth in 2023 was forecast at 2.5 percent.
The central bank reiterated its commitment to using its full range of tools to support the U.S. economy in this challenging time.
The sharp drop by the